H1 2019 Results and Project Update

September 2019

AIM: HGM
 Disclaimer

Certain statements within this presentation constitute forward looking statements. Such forward looking statements involve risks and
other factors which may cause the actual results, achievements or performance of the Group to be materially different from any
future results, achievements or performance expressed or implied by such forward looking statements. Such risks and other factors
include, but are not limited to, general economic and business conditions, changes in government regulations, currency fluctuations
(including the US$/RUR rate), the gold price, the Group’s ability to recover its reserves or develop new reserves, competition,
changes in development plans and other risks.

There can be no assurance that the results and events contemplated by the forward looking statements contained in this
presentation will, in fact, occur. These forward-looking statements are correct or represent honestly held views only as at the date of
delivery of this presentation.

The Company will not undertake any obligation to release publicly any revisions to these forward looking statements to reflect
events, circumstances and unanticipated events occurring after the date of this presentation except as required by law or by
regulatory authority.

***

Total cash costs include mine site operating costs such as mining, processing, administration, royalties and production taxes, but are
exclusive of depreciation, depletion and amortisation, capital and exploration costs. Total cash costs are then divided by ounces sold
to arrive at the total cash costs of sales. This data provides additional information and is a non-GAAP measure.

In line with guidance issued by the World Gold Council, the formula used to define all-in sustaining cash costs measure commences
with total cash costs per ounce sold and then adds sustaining capital expenditures, corporate general and administrative costs, mine
site exploration and evaluation costs and environmental rehabilitation costs. This data seeks to represent the total costs of producing
gold from current operations, and therefore it does not include capital expenditures attributable to projects or mine expansions,
exploration and evaluation costs attributable to growth projects, income tax payments, interest costs or dividend payments.

2
 Highland Gold Today

Four Operating Mines

with 290-300 koz Chukotka
Cluster
Annual Production1 Valunisty
2018: 270 koz Kayen
Kekura
Klen

Pipeline of High-Grade
Development Russia Khabarovsk
Projects Cluster

Low-Cost Producer Baikal

Cluster MNV
with AISC of Belaya Gora
US$ 778 per oz2 Novo Blagodatnoye
Baley Hub
Taseevskoye, ZIF-1,
Sredny Golgotay

Kazakhstan

Strong track record of Kyrgyzstan

Mongolia

paying dividends Operating Mines

Unkurtash
China Development Projects

1. Guidance for 2019 production of gold and gold equivalent

3 2. Figure for H1 2019
 H1 2019 Results Highlights

H1 2019 H1 2018 Operating Highlights

Production 142,254 128,921 ► Production at Mnogovershinnoye (MNV) in H1 2019 rose

(Oz gold and gold eq.) by 23.3% over the first half of last year
All-in sustaining costs ► Newly-acquired Valunisty accounted for 10% of production
778 697
(US$/oz) ► Novoshirokinskoye (Novo) output was 18% lower due to
lower grades year-on-year, although grades improved in
Total cash costs 540 536 the second quarter
(US$/oz)
► Belaya Gora production was 7.5% lower year-on-year due
Revenue to several operational challenges, including mill repairs
174,676 146,897 and a localised fire incident in Q2
(US$ k)
► Construction work at Kekura and an exploration drilling
EBITDA (US$ k) 86,541 71,424 programme at Klen continued throughout H1 2019, as
EBITDA margin 50% 49%
both projects were officially granted residency in the
Chukotka special economic zone
Net profit 45,692 28,639
(US$ k)
Production by Asset (koz)
Net cash flow from
operations 72,566 65,700
(US$ k)

Capital expenditure 31,327 26,534 59.3 61.0

(US$ k) 48.1 49.7

19.8 18.3 14.9

Net debt* 216,917 189,071
(US$ k) H1 H1 H1 H1 H1 H1 H1 H1
4 2018 2019 2018 2019 2018 2019 2018 2019
* On June 30 MNV Novo Belaya Gora Valunisty
 Commitment to Dividends

Dividends Paid 58.0

H1 2019 interim dividend: US$ M 45.5

GBP 0.05 per share 42.5
40.3
Total payout: US$ 22.6 m

25.7 26.7
23.2 21.8 22.6

US$
per 140 186 114 89 83 163 169 215 159
oz
Highland Gold paid an
2011 2012 2013 2014 2015 2016 2017 2018 H1
average of US$ 134 per oz
2019
produced in 2011-2018
12.0%
9.8% 9.1%
10.0%
9.6%
8.0%
7.7% 5.9%
6.0% 6.5%
6.3%
6.2%
4.0%
Future dividends secured by 2.9%
dividend policy, which sets 2.0%
target minimum payout of 0.0%
20% of net operating cash
flow before capex.
* Based on the average share price for the period.
Dividend Yield* H1 2019 yield annualised
5
 Clear Operating Strategy

Maximise the upside

potential of operating
assets
Highland Gold has articulated and
Develop assets at the
executed a clear operating strategy
PFS/DFS stage into
production

Focus corporate
development on regions of
presence
Unlocking Value
De-risk and convert
additional resources into
reserves Control Returns to Deliver
Costs Shareholders Growth
Focus on operational
efficiency and continuous
improvement

Commitment to workplace
safety and protecting the
environment
6
 Maximising the Upside Potential of Operating Assets
Mnogovershinnoye (MNV)
Extending Life of Mine
Goal
► Add reserves to extend the life of mine (was 2018)
Solutions
► Extensive near-mine exploration programme on
existing MNV licences
► Acquisition of three adjacent greenfield licences
► Re-examining historic rock waste dumps
Status
► Life of mine extended to 2029
► Nearly 600k oz Au added to reserves in 2017-2018
► Over 820k tonnes of ore at 1.09 g/t Au taken from
the rock waste dumps to the mill since 2016
► Exploration continues on MNV, MNV Flanks,
Kulibinskaya, Zamanchivaya and Vilkinskaya
– 7k metres drilled in H1 2019
– 1.2 km of trenching in H1 2019
– Annual budget of US$3-5 million
► Given the longer mine life, studies have been
commissioned on potential improvements to the
mine, the mill, and tailings storage.
7
Novoshirokinskoye (Novo)
Expanding Throughput
Goal
► Increase throughput to offset an expected decline
in grades
Solution
► Expand mining and processing capacity from 800k
tonnes/year to 1.3 million tonnes/year
Status
► Stage 1 (mine capacity expansion)
– Construction work is in progress on the
ventilation system, skip hoist, pumping
station, water treatment facility, boiler unit,
and tailings dam upgrade
► Stage 2 (processing plant expansion)
– Technology and equipment selected for ore
sorting with X-ray transmission (XRT)
– Design work on ore sorting facility nearing
completion, with construction due next year
► Completion expected in 2020
Cost: US$42 million in 2019-2020
 Maximising the Upside Potential of Operating Assets
Belaya Gora
Mill Upgrade and Additional Resources
Goals
► Increase recoveries at the processing plant
► Add resources to extend life of mine (was 2023)
Solutions
► Add reserves from nearby Blagodatnoye licence
► Add CIL circuit to the processing plant to improve
recoveries from the current 75% to a range of 86-
91% and enable processing of Blagodatnoye ore
► Exploration on the Belaya Gora Flanks licence
Status
► Processing plant upgrade in the late design phase
– Contractors and equipment selected
– Tailings dam upgrade in progress
– Completion expected in 2020
► 776k oz Au reserves booked for Blagodatnoye,
extending combined life of project to 2032
► Additional resources on the Belaya Gora Flanks
licence identified and being assessed
8 Cost: US $11.4 m for processing plant upgrade
Valunisty
Underground Mining and Mill Expansion
► The Valunisty mine and surrounding KAS licence
were acquired by Highland Gold in December 2018
Goals
► Increase production and lower costs
Solutions
► Move underground to reach higher ore grades
► Expand processing plant capacity from 250k
tonnes of ore per year to 350k tonnes/year
► Increase production from 40-45k oz to ~55k oz per
year
Status
► Engineering surveys, design work, and cost
estimates are in progress for both the underground
mine and the processing plant expansion
► Construction is expected to begin next year for
completion in 2021
 Advancing Our Development Projects: Kekura

Kekura is Highland Gold’s premier development Kekura

project, with high grade ore and low projected costs
Est. Start Date 2023
Life of Mine 16 years
Project Status
Mine Type Open pit & underground
► Definitive Feasibility Study (DFS) published in 2018
Processing Gravity + cyanide leaching
► Camp and pilot processing plant already on site
Processing Capacity 0.8 Mtpa
► Phase 1 facilities in active construction phase
Au Resources (M,I&I) 2.46 Moz @ 8.1 g/t
– Completion expected in 2020
Au Reserves (P&P) 2.00 Moz @ 7.0 g/t
► Work on Phase 2 facilities, including main processing
Au Production 172k oz (years 1-8)
plant (800 ktpa capacity), to begin in 2020 (est. annual) 46k oz (years 9-16)
– Completion expected by 2023 Total Cash Costs (est.) US$ 511/oz
► Stripping and preliminary ore mining in Q4 2019
► Granted residency in the Chukotka Advanced
Special Economic Zone (ASEZ), providing a series of
tax incentives that add more than US$ 100 million to
NPV

Cost: US$229 m (pre-commissioning as per DFS)

Upside Potential
► Exploration drilling commenced on several of 12
additional targets in the broader Kekura licence area
9 to identify additional open pit reserves
 Advancing Our Development Projects: Kekura

Kekura Site Plan 1

11 Open pit
22 Processing plant site 2
33 Power substation
44 Mining support facilities
55 Camp 5
66 Warehouses
77 Fuel storage
88 Communications tower
7

44 2
3
5 77 6
8

10
 Advancing Our Development Projects: Kekura

Existing Site Infrastructure

►Pilot Processing Plant

– Renovations, including steel
frame reinforcement, are in
progress and scheduled for
completion by year-end.
– 120k tonnes per year processing
capacity with expected
recoveries of 35%
– Commissioning in 2020

11
Crushing Unit Diesel Power Station Camp
 Advancing Our Development Projects: Kekura

Phase 1 Construction

►Most Phase 1 facilities at an

advanced state of construction
►Power Substation
– Ready to be connected to the
regional power grid by the end of
2019
►Camp Expansion
– Brought forward from Phase 2 to
improve facilities for construction
– Ground prepared and modular
buildings ordered Camp Expansion Site

Communications Tower

12
Power Substation Assay Laboratory Fuel Storage
 Advancing Our Development Projects: Baley ZIF-1

► Part of Highland’s Baley Hub group of licences, Baley ZIF-1 Tailings

together with Taseevskoye and Sredne Golgotay
Est. Start Date 2021
► Tailings from the processing of ore from the Baley
Life of Mine 11 years
and Taseevskoye mines in 1929-1973
Mine Type Open pit
► Near local infrastructure for the town of Baley
Processing Heap leach
(electricity, roads, water, rail)
Processing Capacity 840 ktpa
► Being targeted for a heap leach operation
9.7 m tonnes @ 0.98 g/t Au
Estimated slime reserves*
and 2.84 g/t Ag
Project Status Estimated contained Au* 344k oz

► Detailed design work completed and submitted for Au Production

15k oz
(est. average annual)
regulatory approval, which is expected later this
Total Cash Costs (est.) US$ 736/oz
year
► Application submitted for admission into the Trans-
Baikal Advanced Special Economic Zone (ASEZ),
which would provide a series of tax incentives
► Construction set to begin in 2020 with first gold in
H2 2021

Cost: US$ 23m in 2019-2022

13
* Estimates to Russian reserve standards
 Advancing Our Development Projects: Baley ZIF-1

Baley ZIF-1 Site Plan

5 1 Open pit mining site
• Sump
• Open pit water drainage
pumping station
1 • Water drainage pipeline
• Settling pond
5
2 HL production site
• Crusher house
• Pelletization circuit
• HL pile
• Pond facilities
6 3 Processing plant site
5
4 • Hydro-metallurgical circuit
• Tanks
3 4 Floating Pumping Station
5 10 kV power line
2 6 • Powerline
• Transformer substation
6 Inter-site roads
• Access road to HL site
• Access road to the
processing plant

14
 H1 2019 Financial Review

15
 H1 2019 Financial Highlights

H1 2018 H1 2019

Gold and GE Production, koz 128.9 142.3

Revenue, US$ m 146.9 174.7
Operating Profit (w/o impairment), US$ m 50.7 57.4
Impairment Losses, US$ m - -
EBITDA, US$ m 71.4 86.5
STRONG BALANCE SHEET
Total Assets, US$ m 1,142.4 1,280.7
Total Equity, US$ m 782.0 865.9
Gross Debt*, US$ m 197.3 221.0
Net Debt*, US$ m 189.1 216.9
KEY RATIOS
TCC, US$ / oz 536 540
AISC, US$ / oz 697 778
Net Debt* / EBITDA 1.2 1.3
EBITDA margin 48.6% 49.5%
DIVIDENDS
Dividends paid during the period, US$ m 24.2 31.9
Dividends declared. GBP per share 0.06 0.05

16 * Including the modification effect of IFRS 9

 Metals Prices and Exchange Rates
HGML Revenue Breakdown
H1 2018 H1 2019 ∆
H1 2019
Gold US$/oz 1,313 1,308 ▼ -0%

Silver US$/oz 16 15 ▼ -6% Other

Metals
MNV Valunisty
Lead US$/t 2,482 1,956 ▼ -21% 45% Cu 1%
10% Zn 1%
Zinc US$/t 3,343 2,744 ▼ -18% Au Pb 3%
11%
89%
Copper US$/t 6,879 6,160 ▼ -10% Ag 6%
Belaya Gora Novo
USD/RUB 59.5 65.1 ▲ +8% 15% 18%

EUR/USD 1.2 1.1 ▼ -7%

H1 2018
GBP/USD 1.4 1.3 ▼ -6%

Cu 1%
MNV Zn 2%
H1 2019 Gold Price vs Volume of Sales 42%

1 320 1 358 Pb 6%
1 292 1 302 1 288 1 283 Au
16%
84%
Belaya Gora Ag 7%
22 Novo
17 13 17 13 17%
10 25%

Jan Feb Mar Apr May Jun

17 ■ Au sold byAuMNV,
sold by MNV, BG, Valunisty,
BG and Valunisty koz(koz) ▬LMBA average
LMBA price, USD/oz
average price (US$/oz)
 Low Cost, High Margin Producer

All-In Sustaining Costs

H1 2019 - US$/oz
1400
 International Majors
1200
1207
 Russian Companies
1112 1109 1085
1026 1023 1002
987 977 977 973
1000 940 936 925 904
855
778
800 720 705 679
584
600

400

200

H1 2019 EBITDA Margin: 50%

Source: Published company data
for H1 2019 (where available)
* Q1 2019 data
18 ** FY 2018 data
 Total Cash Costs & All-In Sustaining Costs

Total Cash Costs TCC by Operating Asset

US$/oz MNV Novo Belaya Gora Valunisty

-3%
+1% -23% +28%

536 540 470

366 86
707 68 795 775 N.A. 730
541
299 385

H1 2018 H1 2019 H1 H1 H1 H1 H1 H1 H1 H1
2018 2019 2018 2019 2018 2019 2018 2019
 Processing costs (US$/oz)

► Total Cash Costs remained practically unchanged at US$540/oz as the influence of the
All-In Sustaining Costs weak ruble was offset by rising Novo TCC (+28%) and the inclusion of Valunisty
► MNV TCC decreased by 23%, aided by 28% growth in the volume of sales and the
US$/oz weak ruble
► Novo TCC increased by 28% due to the lower volume of sales (-13%), salary indexation,
+12%
and changes in contract terms & conditions due to the shipment of lead concentrate with
778 a lower grade (27% versus 30%)
697
► BG TCC decreased slightly to US$775/oz as gold sales were supported by an increase
in processing volume but with a lower average grade
► All-In Sustaining Costs increased by 12% to US$778/oz due to:
– An 85% increase in sustaining CAPEX to replace old equipment
– Higher AISC at newly-acquired Valunisty
19 H1 2018 H1 2019 – The write-down of stockpiles at BG (+US$1.8 m) and Valunisty (+US$3.9 m)
 EBITDA (US$ M)

7.0 2.2 5.7 2.9 0.7 0.6

8.8

79.8 84.6 84.6 87.4 86.7 86.1 87

71 71

H1 Valunisty Exchange Metals Volume of Costs G&A Other H1

2018 Rate Prices Sales Expense 2019

Key Factors EBITDA by Asset

- US$2.2 m – decrease in Au prices for MNV and BG 52% 68% % = EBITDA margin
(-US$0.3 m) and gold equivalent for Novo (-US$1.9 m) 41 40
+ US$5.7 m – increase in the volume of sales by 6%, 39%
57%
including: 29
• Novo - 6.9 koz of Au eq. (-13%) 24
39% 40%
• MNV + 13.3 koz of Au (+28%) 42%
• BG + 0.3 koz of Au (+2%) 10 10 0 8
- US$2.9 m – increase in costs -2
-3
- US$0.7 m – increase in G&A
H1 H1 H1 H1 H1 H1 H1 H1 H1 H1
- US$0.6 m – other operating profits and losses 2018 2019 2018 2019 2018 2019 2018 2019 2018 2019
20 MNV Novo Belaya Gora Valunisty G&A & Other
 Capital Expenditure
MNV
H1 H1 ► US$ 4.3 m – supporting investments (equipment replacement)
US$ k, excl. VAT
2018 2019 ► US$ 1.1 m – exploration work
► US$ 0.4 m – regulatory filings and design work
KHABAROVSK CLUSTER 8,908 10,619 ► US$ 2.7 m – capital development

Mnogovershinnoye 7,388 8,514 Novo

► US$ 1.7 m – supporting investments (equipment replacement)
Belaya Gora 1,520 2,105 ► US$ 1.7 m – capital development
► US$ 1.5 m – Novo 1.3 Mtpa project capex
BAIKAL CLUSTER 7,955 6,185
Belaya Gora
Novo 6,704 4,937
► US$ 1.1 m – supporting investments
Taseevskoye 1,197 1,154 ► US$ 0.2 m – exploration work
► US$ 0.8 m – design work (mining optimization & processing plant
Lyubov 55 94 upgrade)

CHUKOTKA CLUSTER 8,681 13,951 Valunisty (w/ KAS)

► US$ 0.5 m – research work
Valunisty (w/ KAS) - 2,017 ► US$ 1.5 m – supporting investments

Kekura 7,907 10,851 Kekura

► US$ 5.8 m – field camp & road maintenance
Klen (w/ Verkhne Krichalskaya) 774 1,083 ► US$ 0.5 m – exploration work
► US$ 3.2 m – purchases of fuel and consumables for pilot processing plant
OTHER 990 572 and initial open pit mining
► US$ 1.4 m – research work & capital construction for pilot plant
Highland Exploration (Unkurtash) 448 405
Taseevskoye
Other 542 167
► US$ 1.0 m – site maintenance
Total 26,534 31,327 ► US$ 0.2 m – research work for ZIF-1 heap leach

Klen (w/ Verkhne Krichalskaya)

21 Capex budget for 2019: US$124m ► US$ 1.1 m – exploration work
 Credit Portfolio

Debt Status as at 31.08.2019 Debt Breakdown

► Net Debt/EBITDA ratio: 1.3
► Gross debt: US$ 218 m By Lender By Term
► Net debt: US$ 205 m
40%
► Effective interest rate: 4.09% Sberbank
27%
4% 4% Short
– All debt is fixed-rate Term
Alfa Bank Rosbank 73%
► Average tenor: 36.6 months Long
27% 25%
– Was 18.1 months on 30.06.2018 Term
Raiffeisen Unicredit
► Over US$ 500 m of undrawn revolving
credit facilities

4.20% 4.20% 4.09%

Gross Debt (US$ M)
3.44%
Net Debt (US$ M)
2.50% 2.36% Interest Rate
2.09%
1.56% Libor 1M US$

* Excluding US$ 17.7 m of Valunisty

208 232 222 217 218
199 194 205 debt @ 5.12% assumed on
27.12.2018 and repaid in Q1 2019

Debt is free of the modification effect

22 31.12.2017 31.12.2018* 30.06.2019 31.08.2019 of IFRS 9
 2019 Outlook

23
 Key Targets for 2019

► 2019 production forecast: 290,000-300,000 oz gold & gold equivalent

► Continue to advance projects designed to improve operations at existing mines:

√ Near-mine exploration at MNV and adjacent licences
√ Construction on Stage 1 (mine) and design work for Stage 2 (mill) of Novo expansion
√ Design work for mine and processing plant upgrades at Belaya Gora and Valunisty

► Ramp-up construction at Kekura

– Begin initial stripping and mining in Q4 2019

► Capital Expenditure Budget: US$ 124 million

– About 50% of capex for Kekura

► Roll-out new programmes for health & safety, operational efficiency and continuous
improvement across each of the Company's operating units
√ In progress

24
Thank You

www.highlandgold.com
info@highlandgold.com

AIM: HGM